SHIPYARDS


Expanding at home and abroad S


Keppel is building a global network of ship repair yards


hipping markets may in general not be at their best but NelsonYeo,managing director of marine for Keppel Offshore and Marine, is upbeat on the outlook for


their shipyards as a sharp bounce back in the offshore sector puts a squeeze on yard capacity. “Overall we think offshore and marine are


coming back,” saysYeo who is in charge of repair and offshore conversion yards in Singapore, the Philippines and Qatar.On the offshore side of the business he notes the Floating Production Storage and Offloading (FPSO) conversion market remained alive even during the height of the global economic crisis and was coming back now, and the rigbuilding market had rebounded at a much higher intensity than anyone had expected. “Whether the shipping market is high or low is


not relevant sometimes to the yard, it depends on the capacity of shipyards. Repair volume is still low, but generally capacity is being taken up everywhere,” he explains. Looking at the company’s yard in Singapore he


says:“Now we feel a lot better about Singapore as business is coming back again.”While Keppel’s main competitor on home turf, Sembcorp Marine, is building a massive new yard inTuas,Yeo believes it is more cost effective to upgrade and expand their existing facilities. Keppel has started work to widen and extend


its Raffles drydock.The dock will be widened so it can take double-hulled Malaccamax ships and also lengthened to 400 m to allow it to dock the world’s largest containerships.The target is for the work to be completed by the end of this year. The dock will not be out of action while the extension works are carried out as Keppel will carry out a major FPSO job in the dock while other works are carried on around it. Yeo says that Keppel was also extending its


quay length at its Benoi yard by 200 m to give it more “concentrated capacity”.Additionally they have bought an area of land adjacent to theirTuas yard for fabrication work such as topsides of FPSOs.“Our intention is to invest a lot more in productivity enhancement,workshops and so forth to intensify our production in this


Seatrade Singapore Report 2011 21


concentrated area,” he says. While China has long been flagged up as the


big threat to established ship repair hubs such as Singapore,Yeo is backing the Philippines. Keppel has long established presence in the Philippines with yards in Subic and Batangas, and recently upped its stakes buying out local and Philippine government partners. “I think cost escalation in China will be higher


than in Singapore, both in terms of theYuan, and the cost of living and cost of operating in coastal areas is going up. I think shipyards in China are going to be hit with high costs,”Yeo explains. By contrast he says that labour costs at Keppel’s Philippine yards are already lower than China. “We have put a lot more money into Philippines to develop the yards as we believe in the long run the cost of operation in Philippines will be cheaper than China,” he says. The largest dock in Subic has been extended to


550 m in length with three positions so multiple vessels can be worked on at any one time. Keppel has also added new cranes at the yard. Keppel have also invested heavily in training in


the Philippines with a training centre that is according toYeo larger than that in its homebase of Singapore.“We want to develop Philippines into our resource pool where we can mobilize our people worldwide to support our other operations,” he says.


‘


Overall we think offshore and marine are coming back.


NelsonYeo,managing director of marine, Keppel Offshore and Marine


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